Zinc Prices in China May Fall as Plants Restart

BEIJING, May 12 -- Sources reported that Prices of zinc in China, the world largest consumer and producer will probably drop as a recent surge led plants to resume production.

    Li Xialin chief engineer at the country’s third-biggest producer said smelters are restarting as much as 500,000 tonnes of annual capacity. Companies are also starting 700,000 tonnes of new annual capacity.

    Li said “Chinese prices cannot be sustained at recent highs of CNY 13,000 a ton which should be the top end. London prices should also have a rapid decline. He said that the government’s stimulus plans can’t sustain demand for durable consumer goods in future months. China’s zinc imports will slow after the country restarts idled and new capacity.”

    Li didn’t elaborate on his comment about consumer demand.

    (Source: Bloomberg)